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During the Super Bowl, a representative of the pharmaceutical company Eli Lilly posted the on the company's corporate blog that the average cost of bringing a new drug to market is $1.3 billion, a price that would buy 371 Super Bowl ads, 16 million official NFL footballs, two pro football stadiums, pay of almost all NFL football players, and every seat in every NFL stadium for six weeks in a row. This is, of course, ludicrous.

The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion.

The drug industry has been tossing around the $1 billion number for years. It is based largely on a study (supported by drug companies) by Joseph DiMasi of Tufts University. It's a nice number for the pharmaceutical industry, because it seems to justify the idea that medicines should be pricey (and increasingly, they can be very pricey, costing tens of thousands of dollars per patient per year) without making it seem that inventing new medicines is so expensive an endeavor as to be ultimately futile.

But as Bernard Munos of the InnoThink Center for Research In Biomedical Innovation has noted, just adjusting that estimate for current failure rates results in an estimate of $4 billion in research dollars spent for every drug that is approved. But Munos showed me another figure, where he divided each drug company's R&D budget by the average number of drugs approved. This was far more dramatic.

Wanting to make this even more rigorous, Forbes (that would be Scott DeCarlo and me) took Munos' count of drug approvals for the major pharmas and combined it with their research and development spending as reported in annual earnings filings going back fifteen years, pulled from a Thomson Reuters database using FactSet. We adjusted all the figures for inflation. Using both drug approvals and research budgets since 1997 keeps the estimates being skewed by short-term periods when R&D budgets or drug approvals changed dramatically.

The range of money spent is stunning. AstraZeneca has spent $12 billion in research money for every new drug approved, as much as the top-selling medicine ever generated in annual sales; Amgen spent just $3.7 billion. At $12 billion per drug, inventing medicines is a pretty unsustainable business. At $3.7 billion, you might just be able to make money (a new medicine can probably keep generating revenue for ten years; invent one a year at that rate and you'll do well).

There are lots of expenses here. A single clinical trial can cost $100 million at the high end, and the combined cost of manufacturing and clinical testing for some drugs has added up to $1 billion. But the main expense is failure. AstraZeneca does badly by this measure because it has had so few new drugs hit the market. Eli Lilly spent roughly the same amount on R&D, but got twice as many new medicines approved over that 15 year period, and so spent just $4.5 billion per drug.